Adler loses bid to lift directorship ban

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Disgraced former HIH director Rodney Adler has lost his High Court bid to overturn his company directorship ban and fine of $450,000 over the failed insurer's collapse.

Mr Adler had applied for special leave in the High Court to appeal a 2002 NSW Supreme Court decision to ban him from holding a position of company director for 20 years and fine him $450,000 over his role in HIH's demise.

His company Adler Corporation was also fined $450,000.

The collapse of the HIH insurance company in March 2001 was the biggest in Australian corporate history, with losses of up to $5.3 billion.

In 2002, NSW Supreme Court Justice Kim Santow found Mr Adler, who was a director of HIH, and his family company, Adler Corporation, breached the Corporations Act over the transfer in 2000 of $10 million from an HIH subsidiary to Adler Corporation's Pacific Eagle Equities.

Justice Santow found $4 million of the money was used to buy HIH shares to prop up the company's share price, $3.8 million spent on buying three investment holdings from Adler Corporation and the rest given to companies associated with Mr Adler and his company in unsecured loans.

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The proceedings were brought against Mr Adler by the Australian Securities and Investment Commission (ASIC).

His counsel David Jackson, QC, told the High Court in Sydney today that both the ban and the fine were based on Justice Santow finding Mr Adler was involved in dishonest conduct.

But he said dishonest conduct was not raised as an issue at the start of the hearing and the particular behaviour in question was not properly identified.

"That should have been raised at the start of the case not at the end of the case in liability," Mr Jackson said.

But the High Court disagreed and dismissed the special leave to appeal saying it had low prospects of succeeding.